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Social media stocks crater after Facebook reports disappointing earnings

Social media stocks crater after Facebook reports disappointing earnings

February 4, 2022: -On Wednesday, Shares of social network operators Pinterest, Snap, and Twitter declined in extended trading after Facebook owner Meta Platforms issued its fourth-quarter earnings statement that sent the stock down 22%.

Shares of Snap decreased more than 18% after hours. Pinterest moved nearly 10% lower, while Twitter was nearly 8%.

But the impact wasn’t limited to social media. The shares of Amazon, which has a growing advertising business, were down more than 3%. Amazon reports results on Thursday.

Shares of Microsoft, which has exposure to advertising, including through business social network LinkedIn, moved nearly 1% lower.

Facebook’s earnings and user numbers for the fourth quarter decreased short of expectations, and its quarterly revenue guidance range came in below consensus as well.

Microsoft CEO Satya Nadella talked up the opportunity in digital advertising in the previous week, which tells analysts that advertising revenue in the past 12 months, which includes LinkedIn, exceeded $10 billion before traffic acquisition costs.

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Social media stocks crater after Facebook reports disappointing earnings